Saberhagen Company sold $3,700,000,10%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017 and pay interest annually on January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount.

Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at105.

\fAccount Titles and Explanation January 1, 201 Cash 3515000 Discount on Bonds Payable 185000 Bonds Payable 3700000 Dec. 31, 201 Interest Expense 3718500 3: Interest Payable 18500 a: Discount on Bonds Payi 3700000 Saberhagen Company Balance Sheet (Partial) December 31, 2017 A v J Current Liabilities l3 Interest Payable 13500 Long-term Liabilities \\. |K L ' $ -/ Bonds Payable 3,700,000 $ x a k : Premium on Bonds Payable 18500 3885000 I \\. J